12A registration is a single stretch release obtained by most Trusts, right after incorporation to be exempted from paying income tax. Section 8 Company, Trusts and NGOs having 12A registration enjoy freedom from paying income tax on the surplus income of the Trust or NGO. Income tax exemption is available for all non-profit NGOs. Hence, it is important for all Trusts, NGOs and other Not-for-Profit organizations to be aware of Section 12A of Income Tax Act and obtain the same, soon after incorporation of the Trust or NGO. In this article, we look at the procedure for obtaining 12A registration in India.
1) The reserve that is utilized for the beneficent or religious objects is viewed as the pay application. The salary application is only the costs utilized for magnanimous or religious purposes while ascertaining the pay of the trust.
2) The salary gotten will be free from tax collection.
3) The individual enlisted under this area can profit benefits for amassing or putting aside pay which isn't over 15% for the magnanimous or religious purposes.
4) The gathering of pay that is viewed as the salary application as indicated by Section 11(2) won't be incorporated into the aggregate pay.
5) NGOs are qualified for get concedes and assets from different offices. These offices are endowed to give stipends to 12A enlisted NGOs.
6) The Finance Act 2014 has expanded advantages of enlistment for the trusts and establishments that have been enrolled under Section 12AA.
7) The enrolment that is made under Section 12A is a one-time enlistment. When the enrolment is made, it will be dynamic till the date of undoing of the enlistment.
8) There is no prerequisite of re-establishing the enrolment. In this manner, these advantages can be guaranteed at whatever point required by the NGO.